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respondent must show: (1) An underpayment exists; and (2)
petitioner intended to evade taxes known to be owing by conduct
intended to conceal, mislead, or otherwise prevent the collection
of taxes. Sadler v. Commissioner, supra at 102. “Where fraud is
determined for each of several years, respondent’s burden applies
separately for each of the years.” Temple v. Commissioner, T.C.
Memo. 2000-337, affd. 62 Fed. Appx. 605 (6th Cir. 2003). If
respondent establishes that some portion of the underpayment is
attributable to fraud, the entire underpayment shall be treated
as attributable to fraud, except with respect to any portion of
the underpayment that the taxpayer establishes is not
attributable to fraud. Sec. 6663(b).
I. The 1994 Tax Year
Respondent asserts that petitioner’s conviction for an
attempt to evade or defeat tax under section 7201 collaterally
estops him from challenging respondent’s determination that
petitioner is liable for civil fraud penalties under section 6663
for the 1994 tax year. A conviction for an attempt to evade or
defeat tax pursuant to section 7201, either upon a guilty plea or
upon a jury verdict, conclusively establishes fraud in a
subsequent civil tax fraud proceeding through the application of
the doctrine of collateral estoppel. DiLeo v. Commissioner, 96
T.C. 858, 885 (1991), affd. 959 F.2d 16 (2d Cir. 1992); Frey v.
Commissioner, T.C. Memo. 1998-226.
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